House Panel OKs Energy Tax Breaks
One House committee approved a package of energy tax cuts Wednesday for individuals and industry that is more generous than President Bush's plan, while a second panel agreed to a modest fuel efficiency boost for sport utility vehicles.
The Energy and Commerce Committee rejected a proposal that would have brought automobile fuel economy to 37.5 miles per gallon in 10 years, maintaining that such an increase is not currently achievable and would harm the auto industry. Supporters argued Congress can't properly address energy conservation without substantially cutting back on SUV and automobile gas guzzlers.
But the committee, in an energy bill expected to be completed Thursday, agreed to require that sport utility vehicles be held to stricter fuel economy rules with a requirement they cut gasoline use by 5 billion gallons over the next six years.
Supporters said that amounts to a 3 mpg average fleet increase for new SUVs. Opponents estimated it would be closer to a 1 mpg increase. The 5 billion gallons is equal to about two weeks of gasoline consumption by all motor vehicles.
The House Ways and Means Committee voted along party lines to approve the tax bill, which is estimated to cost $33.5 billion over 10 years using projected budget surpluses.
By comparison, the president's plan was put at about $10 billion over a decade, according to the Treasury Department.
The House bill embraces many of Mr. Bush's proposals — credits for hybrid electric-gas cars and solar water heaters, for example. But it adds numerous provisions for the electric, oil and gas, coal and nuclear industries.
"We're doing some of the things the president didn't focus on," said Rep. Bill Thomas, R-Calif., the committee chairman. "We targeted the bill toward three categories: conservation, production and reliability."
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The tax measure was one of a series of bills that House Republicans intend to put together into a single energy package before their annual August recess. The Senate probably will not act on energy measures until the fall.
The debate over automobile fuel economy was the first time in six years that the issue has been addressed by Congress, which since 1995 has barred the Transportation Department from even studying corporate average fuel economy, or CAFE, increases.
The energy bill calls for gas consumption by new SUVs to be reduced by 5 billion gallons over the next six years. Democrats argued that amounts to about a 1 mpg increase. "I don't think this is something we ought to brag about," declared. Rep. Anna Eshoo, D-Calif., who supported much bigger CAFE increases.
A proposal b Rep. Edward Markey, D-Mass., that over the next decade would have increased CAFE standards for cars from 27.5 mpg to 37.5 mpg and for SUVs, small trucks and minivans from 20.7 mpg to 29 mpg was rejected by a 43-11 vote.
"The science doesn't support (such an increase) yet," argued Rep. Fred Upton, R-Mich., calling the proposal "a feel good" goal that isn't achievable by the auto companies.
"Unless we force the development of new technology, the technology is not going to be built," countered Rep. Henry Waxman, D-Calif., in support of Markey's proposal.
Democrats support many parts of the tax bill but refused to vote for it unless budget offsets were found to pay for it. They contend that competing spending and tax cut demands are draining the budget surplus even as it shrinks due to the economic downturn.
"We have written ten $100 checks on a $500 bank account," said Rep. John Tanner, D-Tenn.
Rep. Charles Rangel of New York, ranking Democrat on the Ways and Means Committee, offered an amendment to pay for the energy package by scaling back cuts in the top income tax rate under Mr. Bush's 10-year, $1.35 trillion tax cut. But it was defeated on a 25-15 vote. The bill then passed the panel on a 24-17 vote.
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